HM Revenue & Customs (HMRC) has undertaken an extensive review of around 45 million PAYE (Pay As You Earn) accounts as part of its annual tax reconciliation process. As a result, P800 tax calculation letters are currently being issued to taxpayers, with the checks continuing until November 2026.
This annual reconciliation matches the tax deducted from employees’ pay throughout the year against the actual amount they should have paid. HMRC prioritises contacting those who have overpaid and are therefore due a refund.
Seb Maley, chief executive of Qdos, an insurance provider for flexible workers, highlighted the importance of staying vigilant, particularly for the UK’s estimated 700,000 umbrella workers. He explained that moving between assignments and different PAYE employers can create complexities that lead to incorrect tax payments. HMRC acknowledges that starting and finishing jobs can result in tax discrepancies, so flexible workers should not assume their tax situation is automatically correct.
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Maley also noted that receiving a notification from HMRC stating you are owed money does not always mean a refund will be automatically received. Depending on individual circumstances, taxpayers may need to actively claim their refunds. Last year, more than 730,000 refunds, averaging £855 each, went unclaimed.
If you receive a P800 tax calculation letter, it is important to review the figures carefully and follow HMRC’s instructions to ensure any entitled refund is claimed. When HMRC issues a cheque as a refund, the letter will specify this, and there is no need for the taxpayer to contact HMRC to claim the amount. Cheques are typically sent within 14 days of the letter date. If refunds from multiple tax years are due, a single consolidated cheque will be provided.
Should you believe the amounts used in your tax calculation are incorrect, you should contact HMRC directly, specifying which amounts you dispute and providing the correct figures if possible.